A Giant Comes To Spokane
Anyone driving I-90 west of Spokane has surely noticed the massive construction site near the airport. There are only so many companies out there that would build a facility of such size in our neck of the woods, and already having 50,000 employees in the state of Washington, Amazon was the prime suspect.
Spokane’s worst-kept secret was confirmed this past summer, as the online retailer announced it is constructing another fulfillment center. This will be the fourth such center in the state, soon to join existing centers in DuPont, Kent and Sumner. According to Amazon, the facility will create 1,500 full-time jobs, and the number could swell to around 2,000 total jobs near the peak holiday seasons.
“We’re excited to open a new state-of-the-art fulfillment center in Spokane and to continue innovating in our home state,” said Mark Stewart, Amazon’s vice president of North America Customer Fulfillment. “Washington is known for providing great opportunities for jobs and customer experience, and we are grateful to the dedicated local and state officials and teams who came together to support Amazon in bringing a new fulfillment center to Eastern Washington.”
Amazon employees at the more than 600,000-square-foot fulfillment center will work alongside Amazon Robotics to pick, pack, label and ship items to customers such as games, housewares, school supplies and pet toys. With more and more consumers choosing Amazon’s Prime service, the facility was necessary to continue to meet the demands of guaranteed two-day shipping around our region. State-of-the-art technology combines human and robotic elements to ensure as smooth a process as you will find.
"We are excited to have Amazon join our business community with a significant financial investment and new employment opportunities,” said Al French, Spokane County Commissioner for West Spokane. "Amazon is another Fortune 100 company to see Spokane as a critical part of their success and want to be part of Spokane's growth."
Additional income opportunities are also likely to come along with the building of the new fulfillment center. Amazon is actively building its own distribution network to have more control over how and when packages are received. The company is using a model similar to Uber or Lyft, in which those with a working vehicle can sign up for a block of time to deliver packages without having to commit to full-time employment. Called Amazon Flex (Flex.Amazon.com) drivers choose a block of time they are available, pick up their assigned deliveries and make the drop. Depending on demand and workload, hourly rates can range anywhere from $18 to $25 per hour, according to the company.
Amazon Delivery Service Partners are also being recruited around the country (Logistics.Amazon.com). This service is intended for entrepreneurs who want to start up their own business but don’t have a lot of capital or equity to do so. Startup costs are as little as $10,000, and Amazon provides branded delivery vans, uniforms and consistent schedules while the owner of the business focuses on building and managing their team of employees. Carriers are encouraged to expand their fleet to several delivery vehicles, and six-figure incomes are very possible.
In the fall, Amazon announced it would be upping the minimum wage to all workers to $15 per hour. Many of the fulfillment center jobs will be in this range, but there will also be several management-level positions as well. A concern amongst citizens is the potential to see large increases in home and rental prices with an influx of new industry heading to town.
The Spokane real estate market is currently in a seller’s market with quite low inventory and has been for sometime according to Ken Sax, designated Broker at Keller Williams Spokane and 2018 president of the Spokane Association of Realtors.
“As a result, we have seen consistent price increases with demand being greater than inventory. Think back to 12th-grade economics class and learning about supply and demand,” he said.
Another factor in the rise in home prices is individuals and families moving in from areas such as Seattle, Portland and California, where home prices are much steeper. “This places additional demand on our already low inventory, which continues putting an upward pressure on our prices,” said Sax.
While the facility will employ many at or around the $15-per-hour rate, many managerial and professional jobs will also be available. People in these positions are more likely to look at purchasing a home, whether they are already a Spokane-area resident or moving here from another location. As inventory continues to remain low, Sax expects that the completion of the Amazon fulfillment center will aid in prices continuing to rise.
“I expect the completion of the Amazon facility to do the same thing … put upward pressure on our prices as demand continues to increase.”
It isn’t just home owners who are battling to find housing, but renters are also having a difficult time securing homes, condos and apartments. Average rent continues to rise with a two-bedroom apartment coming in at around $920 per month. Occupancy has been historically low as well, hovering under 3 percent for much of the past few years.
Individuals working full time at Amazon’s base pay would make around $31,000. For the employee to rent the average two-bedroom apartment in Spokane, they would need to devote 29 percent of their pre-tax income to rent.
The federal definition of being “moderately to severely cost burden’” is set at 30 percent. Developers are constructing new complexes in the north, south, valley and Kendall Yards, and most units are being scooped up before the complex is even completed. Sax feels that additional workers will put additional demand on the rental market as well.
“The same supply-and-demand dynamics work the same in the rental arena. And in the rental market, we see demand being greater than inventory. Therefore, my feelings here are the same as in the sales arena,” he said.
The news is good for sellers, however. Anyone who picked up a home during the recession or those who bought in the peak pre-recession have likely regained their value and should have plenty of equity to work with if they are looking to upgrade. While inventory is low and there is competition out there, The Spokane County Association of Realtors feels that many homeowners are listing too high and might have unrealistic expectations of their home’s value, even in a seller’s market.
“As a result, we are seeing more and more sellers sitting on the market since they are overpriced. Then the perception by many is that the market is shifting because they’re seeing their neighbor’s house not selling when in fact, the house isn’t selling because it’s overpriced,” said Sax.
He recommends finding an experienced Realtor and listening to them as they understand market dynamics.
In the case of buyers, Sax said now is not the time to low-ball offer and make huge demands from sellers. Those sellers will often move off from these offers and wait for one more to their liking. As in any market he recommends being pre-approved for your mortgage so you are able to show the seller you are serious.
There are many factors that go into the ebb and flow of a housing market. The state of the economy, interest rates, unemployment, inventory and even what time of year. The opening of Amazon’s new fulfillment center is simply another factor to consider whether you are looking for a first home, an upgrade or looking to downsize.
Spokane is growing and currently shows no signs of slowing down. With a Fortune 100 company placing a major employment center in the city’s backyard, local officials are hopeful that more companies will notice what the city has to offer and bring additional professional jobs to the region. There will be impacts felt from this facility for years to come, and what exactly those will be are still to be determined.